What is the Average College Debt in America?

As the average college debt keeps rising in the United States, many students hesitate before going to college because they worry about how they will pay off those loans later.

Though the government limits how much you can borrow each year and the total amount you can borrow, you may still find yourself owing more than $30,000 when you leave college. As the interest increases on those loans, you may struggle to pay your bills too.

Before taking out loans, you should look at the average debt amount and other factors.

Types of Student Loans

One thing you should think about is the types of student loans now available. The government offers both subsidized and unsubsidized student loans. With a subsidized loan, the government agrees to freeze the interest rate on that loan. You will not incur a single penny of interest until you graduate or do not attend school for a period of six months. With unsubsidized loans, interest accumulates on those loans while you are still in school. Students can also borrow from alternative lenders who usually charge higher interest rates.

States with Highest Debt

According to U.S. News & World Report, nearly 70% of college graduates leave school with more than $28,000 in student loans. The publication also took a look at which states have a higher debt among college graduates. Students living in Pennsylvania, Rhode Island, New Hampshire, Delaware and Minnesota have an average debt of more than $30,000, which is higher than all other states. States with the lowest amount of debt among college graduates include Utah, Florida, Kentucky, Missouri and Washington. The total amount of debt that a student carries also depends on whether they take out more loans for graduate school and whether they attended a public or private university.

Paying Off Your Loans

The government gives you up to six months before you need to make a single payment on your loans. If you take a semester off and then go back to school, the clock on your repayment terms will begin again. You can make small payments on your loans while still enrolled in college, which reduces the amount you will owe later. The government even lets you pay off the interest that accumulates on unsubsidized loans while still enrolled part time or full time in college.

When You Can’t Afford Your Loans

The average college debt keeps rising because so many college graduates find that they cannot afford to make regular loan payments. If you have problems paying on your loans, you can contact the government for help. There are loan forgiveness programs that will remove those loans from your records once you work in a certain area for an extended period of time. Teachers can spend a few years working in a rural school or an urban school and have their loans forgiven. You can also request an adjustment in your payment amount. The government will use your monthly income to determine your monthly payment amount.

The more money you borrow in the form of subsidized and unsubsidized student loans, the more debt you’ll have attached to your name when you graduate college. Though the average college debt is nearly $30,000, you have the option of paying on your debt while still in school and getting help reducing your payments or total debt amount once you graduate.